Correlation Between Zhejiang Juhua and Hengli Petrochemical
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By analyzing existing cross correlation between Zhejiang Juhua Co and Hengli Petrochemical Co, you can compare the effects of market volatilities on Zhejiang Juhua and Hengli Petrochemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Zhejiang Juhua with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Hengli Petrochemical.
Diversification Opportunities for Zhejiang Juhua and Hengli Petrochemical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Hengli is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and Zhejiang Juhua is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Zhejiang Juhua Co are associated (or correlated) with Hengli Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Petrochemical has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Hengli Petrochemical
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 1.42 times more return on investment than Hengli Petrochemical. However, Zhejiang Juhua is 1.42 times more volatile than Hengli Petrochemical Co. It trades about 0.04 of its potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.0 per unit of risk. If you would invest 1,560 in Zhejiang Juhua Co on September 24, 2024 and sell it today you would earn a total of 731.00 from holding Zhejiang Juhua Co or generate 46.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang Juhua Co vs. Hengli Petrochemical Co
Performance |
Timeline |
Zhejiang Juhua |
Hengli Petrochemical |
Zhejiang Juhua and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Juhua and Hengli Petrochemical
The main advantage of trading using opposite Zhejiang Juhua and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Hengli Petrochemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hengli Petrochemical will offset losses from the drop in Hengli Petrochemical's long position.Zhejiang Juhua vs. Zijin Mining Group | Zhejiang Juhua vs. Wanhua Chemical Group | Zhejiang Juhua vs. Baoshan Iron Steel | Zhejiang Juhua vs. Shandong Gold Mining |
Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical vs. Shandong Gold Mining |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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